The central bank has submitted a report to the National Assembly’s supervision delegation on real estate market management and social housing in 2015-2023. Of the total real estate outstanding loans of VND2.88 quadrillion, VND1.09 quadrillion were provided to fund real estate, and VND1.79 quadrillion to fund home purchases.

The report showed a steady increase in real estate credit in the 2015-2023 period.

In 2015-2016, outstanding property loans reached VND400 trillion and the bad debt ratio was 4.2 percent. 

In 2017, loans increased to VND529 trillion, up 9.21 percent and the bad debt ratio rose to 4.58 percent. The figure increased by 23.26 percent in 2019 over the year before, reaching VND1.6 quadrillion.

The loans kept increasing in 2020-2021 with growth rates of 12.06 percent and 15.7 percent, respectively, despite Covid-19.

The strong growth returned in 2022 with outstanding loans reaching VND2.58 quadrillion, up 23.9 percent.

A growth rate of 11.81 percent was reported for 2023, reaching VND2.88 quadrillion.

SBV reported that most real estate loans are medium- and long-term, accounting for 90 percent of total outstanding loans.

In 2015-2023, real estate credit accounted for 18-21 percent of total outstanding loans provided to the national economy.

To control cash flow into the real estate sector, SBV has issued Circulars 36, 22 and 41 recently, stipulating that capital for medium and long-term loans must be between 24 and 34 percent.

The outstanding loans provided to fund real estate accounted for 30 percent of total outstanding loans to the real estate sector. The proportion decreased in 2020-2022 before reaching a peak in 2023.

Meanwhile, the outstanding loans funding real estate consumption accounted for about 70 percent. The highest figure, 68.7 percent, was seen in 2022, and the lowest, 62.12 percent, in 2023.

Regarding selling of houses in the future, the total guaranteed capital was VND307 trillion in the 2015-2023 period. As of December 2023, the balance committed to home buyers had reached VND35.6 trillion, or 4 percent of guaranteed loans.

Credit institutions purchased VND191.4 trillion worth of corporate bonds by December 2023.

According to SBV, most real estate projects need long-term capital, while most capital credit institutions offer short term, so they face risks when providing loans.

Some commercial banks have high ratios of real estate credit to total outstanding loans, which posed credit risks, threatening the financial capability of the banking system.

Luong Bang